Originally posted at FreedomWorks.org.
Speculation has risen that Fed chairman Ben Bernanke may announce yet around round of quantitative easing or QE3 on Friday. As economist Thomas Sowell says, “when people in Washington start creating fancy new phrases, instead of using plain English, you know they are doing something they don’t want us to understand.” The term quantitative easing in layman’s terms just means that the Fed will print more money out of thin air. What could possibly go wrong? Well, for starters, the value of the U.S. dollar will continue to decline and it could set the stage for hyper-inflation.
Of course, the first two rounds of quantitative easing have failed miserably to stabilize the economy. This should have signaled that pumping new money into the economy is just not the solution. But Fed officials who have refused to accept reality continue to run the printing processes on overtime. After QE3 fails—and it will—we might as well expect to see QE4, QE5 and so on until the dollar is literally worthless.
The actions of the Federal Reserve have a dramatic impact on the lives of every single American. The central bank essentially controls the value of the money that we have in our pockets. QE1 and QE2 can be blamed in large part for the skyrocketing price of food at the grocery store. The same supply and demand rules apply to money. The more dollars we have in the circulation, the less valuable the money becomes. The Fed is a main reason why it’s costing us more dollars to fill up our gas tank nowadays.
For decades, Rep. Ron Paul (R-Texas) was the lone voice in Washington speaking out against the Federal Reserve. He writes that “the inflation tax, while largely ignored, hurts middle-class and low-income Americans the most. Simply put, printing money… dilutes the value of the dollar, which causes higher prices for goods and services. Inflation may be an indirect tax, but it is very real — the individuals who suffer most from cost of living increases certainly pay a ‘tax.’” QE1, QE2 and QE3 are nothing more than stealing wealth from the people through the hidden tax of inflation.
Our Founding Fathers would surely be outraged by the existence of the Fed. These great men believed in a limited government that was held accountable to the people. The Federal Reserve, which is generally regarded as a quasi-governmental entity, has less oversight than even the Central Intelligence Agency (CIA). The most powerful central bank in the world makes all of its decisions without even a single vote from our elected representatives in Congress.
You can bet that the Fed is up to no good behind closed doors. Due to a provision under the misguided Dodd-Frank financial overhaul law, the Government Accountability Office (GAO) conducted a one-time, watered-down audit of the central bank back in July. It gave the American people their first peek into the central bank’s books but prevented investigators from peering into their deliberations on interest rates and the most crucial transactions of the Fed. We still need to pass a true audit the Fed bill like Ron Paul’s Federal Reserve Transparency Act of 2011 that would require comprehensive audits on a regular basis.
The first ever audit revealed that the central bank “loaned” out $16 trillion at a zero percent interest rate to corporations and banks around the world during the height of the financial crisis. To put that number into perspective, the Gross Domestic Product (GDP)—the value of all economic activity within a country— of the United States is only $14.12 trillion. It’s no wonder that the Fed is desperately trying to protect their privileged secrecy.
The Fed used to be the giant elephant in the room that nearly everyone ignored. We can see the political tide shifting since it has suddenly become popular to criticize the Fed. I have a strong feeling that the rise of the Ron Paul phenomenon has something to do with it. The author of the book End the Fed just might be onto something. A true audit is the first step to letting the American people know what’s going on with their money. The next step is to abolish the Federal Reserve System.